Retail sales growth in Germany at six-month high in November
Staff Writer |
German retailers enjoyed a solid rise in sales in November, with growth on a month-on-month basis the strongest seen since May, according to the latest PMI survey data from IHS Markit.
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Nonetheless, gross margins remained under pressure, with retailers facing a steep rise in purchase prices whilst also using discounts to boost sales.
The seasonally adjusted headline Germany Retail PMI registered 54.6 in November, up from 51.2 in October.
The latest reading was the highest seen for six months and signalled solid monthly growth in like-for-like sales.
Sales were also substantially higher than during the same period in 2016.
The rate of growth on a year-on-year basis was in fact the strongest seen since April.
The survey’s anecdotal evidence found that a rise in sales resulting from a general improvement in consumer demand was augmented by the introduction of new products and models, as well as discounted selling prices.
Despite sales rising in November, retailers (on average) failed to achieve their targets for the month, thus continuing a trend seen since May.
That said, the degree of underperformance in the latest survey period was the least marked for five months.
November’s survey meanwhile showed a further improvement in retailers’ confidence towards future sales.
The degree of optimism reached the highest since March and was among the strongest recorded since the introduction of the future expectations series to the survey in 2004.
Factors expected by survey respondents to support sales in the coming months included Christmas trading, spring sales and generally stronger consumer demand.
Retailers remained in hiring mode in November, which was reflected in another modest increase in sector employment to follow that seen in October.
The pace of job creation was broadly in line with the average recorded for the year so far.
Retailers faced a sharp rise in average prices paid for purchases in November, with the rate of cost inflation down only slightly from a 67-month high in October.
Dairy products, fruit and vegetables were the items that retailers most frequently identified as up in price.
Despite being under pressure from sharply rising costs, retailers still reported using discounts to supports sales, resulting in a further (albeit slower) decrease in gross margins. ■